Wage Theft: How to Check & Report It

Wage theft is when an employer deliberately underpays or fails to pay an employee their correct entitlements. This includes underpaying base rates, withholding penalty rates, not paying superannuation, failing to pay overtime, making unauthorised deductions, or not providing payslips.

As of 1 January 2025, wage theft is a criminal offence under the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024. Employers who intentionally underpay workers can now face criminal prosecution, with penalties of up to $7.825 million for companies and $1.565 million or up to 10 years' imprisonment for individuals.

The criminalisation provisions apply to intentional conduct — meaning the employer knew they were underpaying and did it anyway. Genuine mistakes can still be addressed through the civil penalty framework, but the new Voluntary Small Business Wage Compliance Code provides a pathway for small businesses to self-correct without facing criminal charges.

Wage theft in Australia is systemic and widespread. Research from various sources estimates that Australian workers are collectively underpaid by approximately $1.3 billion every year.

The worst-affected industries include:

• Hospitality — cafes, restaurants, and fast food are consistently the top sector for underpayment complaints to the Fair Work Ombudsman
• Retail — particularly smaller retailers and franchises
• Fast food and takeaway — young workers and international students are disproportionately targeted
• Agriculture and horticulture — seasonal workers and visa holders are especially vulnerable
• Cleaning and security — subcontracting chains often lead to wage underpayment

The Fair Work Ombudsman recovered over $532 million in unpaid wages for Australian workers in the 2023-24 financial year. Major brands including Woolworths, Coles, Commonwealth Bank, ABC, Qantas, and Super Retail Group have all disclosed significant underpayment issues in recent years — some totalling hundreds of millions of dollars.

Workers aged 15-24, employees on temporary visas, and casual workers are the most likely to be underpaid.

Follow these steps to check whether your employer is paying you correctly:

Step 1: Find your correct award or agreement. Most Australian employees are covered by a modern award or enterprise agreement. Use our Award Finder to identify which one applies to your role.

Step 2: Check your base pay rate. Look up the minimum rate for your classification level in your award. Use our Pay Calculator to see the exact rate you should be earning, including any recent annual wage review increases.

Step 3: Check penalty rates and overtime. If you work weekends, public holidays, early mornings, or late nights, you're likely entitled to penalty rates. Use our Penalty Rates Calculator to check the correct loadings for your award.

Step 4: Verify your super contributions. Your employer must pay 12% of your ordinary time earnings into your super fund. Log into your super fund to check contributions match what they should be. Use our Pay Calculator to see the correct amount.

Step 5: Run the numbers. Use our Underpaid Check tool to compare what you've been paid against what you should have been paid. It calculates any shortfall automatically and tells you what to do next.

Step 6: Keep your payslips. Your employer must give you a payslip within 1 business day of payday (section 536). If you're not getting payslips, that's a breach — and a red flag.

Watch for these red flags — any one of them could indicate wage theft:

1. No payslips, or payslips with missing information. If your employer doesn't provide payslips, or the payslips don't show hours worked, pay rate, super contributions, and leave balances, something may be wrong.
2. Paid in cash with no records. Cash payments aren't illegal, but they're commonly used to avoid paying correct rates, super, and tax. If your boss insists on cash-only with no payslip, be suspicious.
3. Asked to work "off the clock." Starting 15 minutes early to set up, working through lunch, or staying late to clean up — if you're not being paid for this time, it's wage theft.
4. "Salaried" but working way more than 38 hours. A salary must cover all your entitlements including overtime and penalty rates. If your effective hourly rate drops below award rates, you're being underpaid.
5. No penalty rates on weekends or public holidays. Unless your enterprise agreement specifically trades off penalty rates for a higher base rate (and it must leave you better off overall), you should be receiving penalty loadings.
6. Super doesn't match. Check your super fund statements — if contributions are missing, late, or lower than 12% of your ordinary time earnings, your employer is in breach.
7. Told you're a "contractor" but treated like an employee. If your boss controls when, where, and how you work, provides tools and equipment, and you can't subcontract the work — you're likely an employee regardless of what your contract says. Use our Employment Check to find out.

If you've confirmed you're being underpaid, here's how to report it and recover what you're owed:

1. Talk to your employer first (optional but recommended). Sometimes underpayment is a genuine mistake. Raise the issue in writing (email) so you have a record. Reference your award and the specific rates you should be paid.

2. Contact the Fair Work Ombudsman. You can lodge a complaint online at fairwork.gov.au. The FWO can investigate, mediate, and take legal action against employers. Their hotline is 13 13 94 (Monday to Friday, 8am-5:30pm).

3. Contact your union. If you're a union member, your union can advocate on your behalf, negotiate with your employer, and provide legal support. Even if you're not a member, many unions offer free initial advice.

4. Lodge a small claims application. For amounts up to $100,000, you can lodge a small claims application with the Federal Circuit Court or a state magistrates court. The process is designed to be accessible without a lawyer.

5. Report to state authorities. Some states have their own wage theft bodies — for example, Victoria's Wage Inspectorate has the power to prosecute wage theft as a criminal offence under state law (operational since July 2021).

Important: You generally have 6 years to claim back pay under the Fair Work Act (section 544). Don't delay — the further back you need to go, the harder it can be to gather evidence.

The biggest change to wage theft enforcement in Australian history took effect on 1 January 2025. Under the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024, intentional underpayment of employees is now a criminal offence under the Fair Work Act.

Key changes:

• Criminal penalties: Companies face fines of up to $7.825 million or three times the underpayment amount (whichever is greater). Individuals face up to $1.565 million in fines and/or 10 years' imprisonment.
• Prosecution by the Commonwealth: The Commonwealth Director of Public Prosecutions (CDPP) will handle criminal prosecutions, with referrals from the Fair Work Ombudsman.
• Voluntary Small Business Wage Compliance Code: Small businesses (fewer than 15 employees) that self-report and rectify underpayments in accordance with the Code will not face criminal prosecution for those underpayments.
• Cooperation agreements: Employers who cooperate with the FWO can enter into agreements that may result in civil penalties rather than criminal charges — similar to enforceable undertakings.

Victoria and Queensland already had state-level wage theft criminalisation laws, but the federal scheme now provides a nationally consistent framework. The federal laws will take precedence where they overlap with state provisions.

If you've been underpaid, you may be entitled to significantly more than just the missing wages. Here's what you can claim:

Back pay: The full amount of underpayment going back up to 6 years from the date you lodge your claim. This includes base rate shortfalls, missing penalty rates, unpaid overtime, unpaid leave entitlements, and missing superannuation contributions.

Interest: Courts can order interest on the underpaid amounts from the date each payment was due. This can add up substantially over several years of underpayment.

Superannuation: If your employer failed to pay the correct super guarantee (12%), the ATO can impose the Super Guarantee Charge on the employer, which includes the unpaid super amount, interest of 10% per annum, and an administration fee of $20 per employee per quarter.

Penalties: The Fair Work Ombudsman or a court can impose penalties on the employer — up to $93,900 per contravention for a company and $18,780 per contravention for an individual. Each pay period where underpayment occurred can be a separate contravention, meaning penalties can add up quickly.

Compensation for loss: In some cases, courts can award compensation for non-economic loss, particularly if the underpayment caused financial hardship, stress, or other harm.

Use our Back Pay Calculator to estimate how much you may be owed, including the compounding effect of missed super contributions over time.